The news recently has been all about Coronavirus. How many may get sick and the impact on the economy seems to be all the news can talk about. But I don’t really want to talk about those things. Rather I’d like to talk about how Covid-19 could change your career and the world of business.
I’m Not Going to Tell You Coronavirus Will Be a Non-Incident
Other then a post on not going to work when you are sick, I have largely avoided the topic of the Coronavirus. I have shared a little of others work on our Twitter feed, but otherwise largely ignored the topic. That really boils down to I am neither a doctor nor someone on the ground who has studied the virus.
Which means my voice on your odds of getting the virus has no value. Now that doesn’t mean I don’t have a position. It just means I believe I’m more likely to be impacted in the short run by the related virus panic then the virus myself. So other than telling you not to panic I don’t have much to contribute on the short term impacts.
The Long Term Impact of Coronavirus
Stock market slides, viruses, and everything else will pass into history one way or the other. So the real area I might be able to contribute that might be of value is an analysis of what this virus may do to your career and business going forward. I’m not the only one writing on this topic, Indeedably wrote a great post a few days ago on a more narrow focus.
The Supply Chain Impact
Lets first look at the more obvious impacts. China is shut down. Supply chains are reaching the straining point as items manufactured there are not making it to their end businesses. In the long run, companies are most likely going to push away from China-sourced manufacturing. The smart ones will probably go to redundant or multi-sourced manufacturing.
I do not believe this means the manufacturing base will move back into the US. The comparative advantage of lower-cost manufacturing centers is just too large to be ignored. But going forward I could very much see manufacturing for the same product being shared between say China and Mexico. Spread the risk around so to speak.
Even before the virus manufacturing was shifting away from China. Their comparative advantage has begun to wain vis-a-vis other regions. This event will likely speed that transition.
Remote Work During and After Coronavirus
But shifting manufacturing plants won’t be the only likely impact. All throughout the world businesses are executing models where the workers are shifting to a work from home model. Many industries have been reticent to shift to this model. The simple reality is old fears of out of sight out of mind die hard. But if the businesses continue to be resilient after the massive shift to remote work the genie will be out of the bag. The model will have proved itself to be just as effective as on-site for many roles, thus accelerating the move towards a remote freelance economy I have previously postulated.
But what about those amongst us that work in the service industry where remote work is not possible? Well if it gets bad enough I suspect you’ll see a major ramp-up in automation to remove these jobs altogether. Depending on how long this lasts I would recommend folks in a direct service position accelerate any alternative career aspirations they may have. Otherwise, you may be left out in the cold. (Pun intended, what too soon?)
Business Travel and Coronavirus
The final impact I see will be on business travel. Regular readers or those I have met me in person know I most certainly qualify as a road warrior. In fact, since the beginning of the year, I have traveled 50% of the weeks. That number is in-fact tame when I turn around and look at some of the managers I work with regularly.
But here is the thing, many people that travel for business can just as easily do things remotely. I can’t recount how many times I have seen a manager or executive fly to some remote location just simply to “check things out”. My prediction is if the virus continues to be an issue most people that don’t really have a reason to fly for business, won’t.
I don’t fall into this category of flying to tick off a box, unfortunately or fortunately. It would take a halt in Mergers in Acquisition, a change in jobs, a financial calamity for my employer, or me quitting to get me off the travel treadmill. But I strongly suspect the numbers flying with me will plummet.
Based on this I would recommend brushing up on your telepresence and teleconference etiquette. You might find yourself doing so a lot more with others in your corporation.
Investing to Proft from Coronavirus?
I’d like to say all the above can lead you to potentially extremely profitable investments in companies, but I’ve been around long enough to know better. The simple reality is all the above will still be long term trends. The behavior of any stock’s value meanwhile will remain influenced by other short term factors. As the saying goes the market can remain irrational longer then you can remain solvent. I am not even willing to weigh in on the travel industry impacts.
These type of major events have a habit of changing how people approach work, investing, and life. Just as the great recession changed these behaviors, so too will the Coronavirus. Anyone else see any other potential long term trends from this potential pandemic?